ONS Finds UK Productivity Growth Stronger Using New Measurement Approach
New Methodology Reveals Enhanced Productivity Growth
LONDON, Sept 17 (Reuters) - Britain's underlying economic growth appears to have been a bit stronger than previously estimated, the country's statistics office said on Thursday, citing a new methodology for measuring productivity.
Experimental Approach and Results
The Office for National Statistics said an experimental approach to estimating changes in productivity showed growth in output per hour averaged 1.3% a year between 1997 and 2024.
That compared with 1.1% growth under the ONS's current approach, the agency said.
Comparison of Output per Hour
Output per hour was estimated to be almost 41% higher than in 1997 under the new approach, compared with 34% under the current one.
Details of the New Methodology
Integration of Tax and Survey Data
The new methodology - which will replace existing UK labour productivity statistics - uses tax office data on the number of people in payrolled employment alongside the ONS's flagship Labour Force Survey (LFS) which has been plagued with low response levels since the COVID-19 pandemic.
The new approach also includes a jobs survey sent to employers by the ONS among other inputs.
Implications for UK Economy
Government Efforts and Think Tank Analysis
Successive British governments have promised to boost productivity to speed up the economy, improve living standards and ease some of the pressure on the public finances.
Last month, the Resolution Foundation, a think tank, said its measure of productivity showed annual growth in output per hour averaged 1.1% over the two years to the end of June 2026, up from an annual decline of 0.7% in the two previous years.
Expert Commentary on Productivity Puzzle
Cliodhna Taylor, head of productivity statistics at the ONS, said Thursday's estimates reduced the size of Britain's productivity slowdown by around half.
"However, overall, the 'productivity puzzle' remains, albeit more muted than before, as these data still point to a fundamental shift in the UK economy following the financial crisis" of 2007-08, Taylor said in a blog post.
(Writing by William Schomberg; editing by Suban Abdulla)
